A New Vision for Ethics and Compliance
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Ethics and compliance programs are becoming increasingly significant in the business world as more consumers and corporations turn their attentions to the importance of environmental, social and governance (ESG) business initiatives. As a result, the business environment needs to think about ethics and compliance in newer ways.
Alison Taylor, a clinical associate professor at NYU Stern School of Business and author of “Higher Ground: How Business Can Do the Right Thing in a Turbulent World,” spoke about this topic with ACFE Vice President of Communications Mandy Moody, CFE, at the 2024 ACFE Women’s Summit. Taylor spent 12 years in corporate investigations, and in that time, she took a deeper look into ethics and compliance, learning “that the facts matter far less than culture and leadership.”
“I started to ask a lot of uncomfortable questions about what was really going on and what the point of my work really was,” Taylor said.
The Lens of Simplicity
Taylor called on the business world to simplify things when it comes to ethics and compliance. “I think it’s important to try to cut through all the noise…There’s a lot of jargon,” she said. “One of the challenges I had when I first started writing the book [was] there’s not even good words to use to describe what we’re talking about. I found it remarkable.” Taylor mentioned that when she was interviewing experts for her book, they even tried to avoid using the term “ethics,” which she sees as a problem.
So, what is making this topic so complicated? Taylor believes lawmaking plays a role.
“In the world we’re in today, there are two issues that jump out there,” she said. “One is that international laws are increasingly inconsistent. If you’re in compliance, you have to navigate across all these various disconnects.”
“Also, I think the law has not become the good anchor for what it means to be an ethical business anymore,” she said. “I do think we need to think about what it means to be an ethical business and we can’t say, ‘As long as you don’t break the law, everything’s fine,’ because that clearly isn’t the case anymore.”
“A corporation isn’t a person.”
According to Taylor, people talk about companies like they are people, which she believes needs to stop. “We personify [corporations] and say, ‘Coca Cola did this, Salesforce did that,’ as if they’re people with a singular brain...A corporation isn’t a person, and a corporation obviously can’t operate without any regard for its context. We don’t just need new approaches and practical tools; we need new metaphors. The reality is a corporation is a system. It’s a social system. It sits in other systems. So, if there are problems with racism or a lack of women’s rights in society, obviously, they’re going to show up in corporations. Corporations sit in a nexus of social, environmental, political, other systems, so you can’t cut yourself off from that.”
“It would be helpful for many companies today to base their ethical commitments on their impact on human beings,” Taylor added. “That certainly doesn’t address all questions, but one of the things I like about this argument is that there is a framework from human rights.”
Taylor stated that these frameworks help delineate what the role of business is and what the role of government is. “There’s a lot of rhetoric out there suggesting companies should take on all sorts of problems they can’t necessarily solve. “What I like about human rights is it provides rigor.”
Making Ethics Less of an Eye Rolling Subject
Taylor mentioned she likes the word “integrity,” but ethics and compliance teams overuse the term in mission statements and other organizational values. She called on organizations to be more ambitious and specific when creating value statements. Focusing on the value of what companies provide and the kinds of things they aren’t going to take on avoids the problem of “corporate overpromising,” which fuels hypocrisy between what is said and what is actually delivered.
Meanwhile, Taylor said transparency among organizations has been treated like it’s “stealth PR.”
“We’ve got this idea that if you say something’s difficult, and you say something is a problem, and you say you haven’t gotten this totally wrapped up—that’s gonna be somehow devastating and you’re going to get sued,” she explained. “I think it’s less risky than we think it is. For the companies that go ahead and manage to do that, I think it actually builds more trust paradoxically because we’re in such a low trust environment that crowing about how you’re perfect is not the way to build more trust…We need less overpromising and more of a reality check.”
Investing in Ethics and Compliance Programs
She wrapped up her discussion by talking about how employees can get their organizations to invest in ethics and compliance programs. She called on senior leadership to think about ethics and compliance as a strategic function, rather than merely checking a box, and prioritize culture and human behavior as driving factors for these programs.
“I think everyone in this room has this amazing opportunity to have a broader, more strategic lens on ethics and to reframe their role and to reframe their career in that light,” Taylor said. “I would encourage everybody to get much more comfortable with both the era of responsible business and ESG and culture and human behavior.”
